National Association of Home Builders Discusses Economics and Housing Policy

Declining New Home Size Trend Continues

After increasing and leveling off in recent years, new single-family home size continued along a general trend of decreasing size during the third quarter of 2017. This change marks a reversal of the trend that had been in place as builders focused on the higher end of the market during the recovery. As the entry-level market expands, NAHB expects typical new home size to fall as well.

On a less volatile one-year moving average, the recent trend of declines in new home size can be see on the graph above, although current readings remain elevated. Since cycle lows (and on a one-year moving average basis), the average size of new single-family homes is 10% higher at 2,620 square feet, while the median size is 14% higher at 2,399 square feet.